If you've a few hundred dollars to invest right now but are worried about market uncertainty and volatility, there is some good news for you: You can confidently invest even in uncertain and volatile markets, like the current one. In fact, you can buy top stocks that you plan to hold for the long term at attractive prices during market corrections.
The key is to identify great companies with solid performance track record and attractive growth prospects. Let's discuss five such companies.
JPMorgan Chase
Rising interest rates bode well for a bank's interest income. However, it is the possible weakness in JPMorgan Chase's (JPM 2.51%) other businesses that is weighing on the stock lately. JPMorgan Chase expects its net interest income to rise from $44.5 billion in 2021 to over $56 billion this year. Interest rate hikes are expected to drive a major chunk of this growth.
On the flip side, JPMorgan's home loan originations in the first fell 37% year over year, mainly due to rising rates. At the same time, lower equity and debt underwriting activity as compared to record levels last year is impacting the company's investment banking fees.
Overall, with a solid track record of dividend growth for a decade, concerns relating to JPMorgan Chase look clearly overblown.
JPM Dividend Per Share (Quarterly) data by YCharts.
The dividend yield on the stock has risen to roughly 3.3%, well above its 10-year average yield of nearly 2.6%. Likewise, JPMorgan Chase stock's price-to-earnings ratio of nearly 9 is well below its historical average. Overall, now is a great time to buy this top stock for the long-term.
IBM
IBM (IBM 0.06%) could finally be putting a decade of falling sales behind it to enter a new era. The technology giant posted an 8% year over year (YoY) growth in sales in the first quarter. Importantly, the company's hybrid cloud revenue rose 14% YoY. On a constant currency basis, the consolidated revenue was up 11% whereas hybrid cloud revenue grew 17% YoY.
IBM is laser focused on transforming itself to capture the growing hybrid cloud and AI (artificial intelligence0 market. Its Red Hat acquisition and spinoff of its managed IT infrastructure services are part of this transformation. IBM is a Dividend Aristocrat with 27 consecutive years of dividend growth.
JPM Dividend Yield data by YCharts.
The stock is trading at a dividend yield of 4.8%, higher than its 10-year average yield of 3.8%. In short, IBM is a great stock for long-term investors looking to invest in cloud computing and software growth.
Southern Company
Investors' flight to safety has caused the stock of Southern Company (SO 2.24%) to rise nearly 5% so far in this year while the S&P 500 Index is down roughly 18%. The recent rise in the stock's price has caused its dividend yield to fall to 3.7%, roughly 800 basis points lower than its 10-year average yield of 4.5%.
However, it still makes a lot of sense to buy this top utility stock right now for two reasons. One, the company is finally about to complete its Vogtle nuclear plants, after lots of delay and cost overruns. Once complete, these will provide Southern Company with years of reliable power and cash flows. Two, the positive development will likely prevent the stock's price to fall back to earlier levels.
With 21 consecutive years of dividend increases -- and 75 consecutive years of flat or growing dividend -- Southern Company's dividend track record is solid. Dividend investors can expect growing dividend over the coming several years from this rock-solid utility.
ONEOK
Gas-focused pipeline operator ONEOK (OKE 2.25%) has delivered impressive performance over the years. In the first quarter, the company reported an 11% increase in its adjusted EBITDA. ONEOK's EBITDA growth was driven by higher natural gas and liquids volumes.
ONEOK has increased or held constant its per share dividend for more than two decades. The company's fee-based earnings and strategically located assets are largely behind this consistent growth despite volatile commodity prices.
Although majority of ONEOK's earnings are fee-based, its natural gas and liquids marketing business allows it to generate higher earnings when pricing environment is favorable.
With a dividend yield of around 5.8% as of this writing, ONEOK stock looks very attractive for long-term dividend investors.
Darden Restaurants
Founded more than 80 years ago, Darden Restaurants (DRI 0.14%) operates some of the most well-known full-service restaurant brands in the U.S. The company owns more than 1,800 restaurants in the U.S. and Canada. Like other restaurants, Darden's operations were severely hurt during the pandemic, forcing the company to temporarily suspend its dividend.
However, Darden Restaurants is well on its way to recovery now. In its fiscal quarter ended Feb. 27, 2022, the company reported 41.3% year-over-year growth in sales driven by same-restaurant sales growth as well as addition of new restaurants.
For its fiscal year 2022 (ending May 30, 2022), the company expects its total sales to grow 9% to 10% higher than its pre-COVID sales. It expects same-restaurant sales growth of 29% to 30% over fiscal 2021. Moreover, it expects 35 new restaurant openings for the year.
Although commodity and labor price inflation are a challenge, Darden still expects its full-year adjusted EBITDA margin to grow 200 basis points from pre-COVID levels. Overall, with a dividend yield of 3.7%, Darden Restaurants stock looks a solid buy for long-term investors.
